Africa is not a homogeneous market, but a continent with vastly different levels of development and market sizes. While economies like Kenya, Rwanda, Nigeria, and Ivory Coast are growing at rates between approximately 3 and 71 TB annually, increasingly important startup ecosystems are also emerging.
As the economy grows, so does the need for cost-efficient and fast payment systems. While this topic is also discussed for payments within a country, it is particularly relevant for international payments.
Stablecoins are gaining traction in this environment primarily due to the idea of enabling faster processing, fewer intermediary chains, and better availability of dollar liquidity for trade and treasury purposes. Furthermore, existing mobile money remains the dominant local payment system, especially for smaller transactions. In sub-Saharan Africa, approximately 33 million adults hold mobile money accounts, making the region the global center of this infrastructure. However, stablecoin transactions technically allow for higher transaction amounts and facilitate cross-border money transfers. Unlike mobile money, stablecoin payments are therefore becoming increasingly important, particularly for larger international transactions.
Sub-Saharan Africa remains the most expensive remittance region
The traditional correspondent banking architecture remains expensive and slow in many corridors; the World Bank continues to rank sub-Saharan Africa as the most expensive remittance region (Q2/2024: 8.37 % average cost). For a company, this translates operationally into more fee hops, longer settlement times, higher working capital requirements, and lower margins. The macroeconomic significance of remittances is demonstrated by the scale of annual payments: USD 54 billion in inflows to sub-Saharan Africa in 2023.
The oft-repeated statement, "Bank infrastructure is less available or more expensive," is reflected in everyday financial access barriers: distance, costs, documentation hurdles, and limited formal banking coverage remain structural factors in many markets. This is one of the reasons why wallet models with stablecoins have scaled faster than traditional branch banking.
The shift is already visible on-chain: Sub-Saharan Africa received around USD 125 billion in on-chain volume in 2024; stablecoins account for around 43 % of the regional crypto transaction volume.
Fragmented liquidity causes bottlenecks in large transactions.
In rapidly growing markets, numerous smaller payment and fintech players often emerge, whose own liquidity reaches its limits when dealing with larger transaction sizes. Driven by consolidation, however, increasingly large liquidity providers are emerging, capable of providing the necessary liquidity depths across the board. The pattern of one-sided flow directions in certain corridors (e.g., a strong imbalance between inflows and outflows) regularly drives up costs and creates hedging problems. The structural nature of this bottleneck is also evident in the trade finance sector: ADB estimates the gap for Africa in 2024 at approximately USD 73.6 billion, citing insufficient FX liquidity, correspondent bank limits, and regulatory restrictions as key obstacles. Afreximbank even estimates the annual demand at around USD 100 billion, a similar figure.
USD and EUR liquidity are difficult to access for many African institutions. The USD dominates, particularly due to the market breadth of USD stablecoins, while EUR liquidity is limited, partly due to a lack of relevant EUR stablecoins. TokenPay views the limited relevance of EUR stablecoins in global settlement as a strategic disadvantage for Europe. According to the BIS, approximately 991 TP3T of the stablecoin market capitalization is USD-denominated, and roughly 901 TP3T of that is attributable to the two issuers Tether (USDT) and Circle (USDC). The ECB continues to describe EUR stablecoins as a niche market.
The shift towards Asia/China is practically visible through settlement initiatives by African banks and FinTechs: direct yuan settlements are being established to reduce the dollar detour. Reuters reports on concrete implementation steps by major banks, and even stablecoin transfers are now connected to China. Macroeconomically, this fits into a larger picture: according to Chinese customs, China-Africa trade in 2024 amounted to around 2.1 trillion yuan, or approximately 291 billion euros. China thus remained the continent's most important trading partner for many years. At the same time, Europe has the opportunity to make its own interoperable infrastructure with euro liquidity in the form of stablecoins more marketable, instead of simply reusing USD rails.
The trend is clearly towards regulation and compliance.
On a macro level, the room for maneuver for many central banks in Africa remains limited: IMF data most recently confirmed for 2025/2026 shows that a third of central banks still have extremely tight reserve buffers of less than three months' import coverage. External price shocks thus disproportionately affect import-dependent baskets of goods. In addition, de-risking and the decline in correspondent banking relationships act as a structural brake on favorable FX and payment supply.
Simultaneously, in the EU, the following regulations apply: MiCA/EMT/CASP are already tightly regulated and operationally concrete; stablecoin issuers require clearly defined licensing pathways and must meet stringent redemption/reserve and governance requirements. Circle is a prominent example of this through the EMI structure in France.
In many African jurisdictions, however, the market lies somewhere between sandbox, transitional regime and gradual VASP formalization – with very different priorities between AML/CFT, capital control and consumer protection.
The compliance trend is nevertheless clear: Kenya, for example, is actively working through the FATF guidelines and has enacted a valid framework law with the VASP Act No. 20 of 2025, which defines the roles of the CBK and CMA and explicitly addresses stablecoin issuance. In South Africa, the FSCA has already processed a large proportion of applications (300 out of 512) under the CASP regime.
Central banks cannot control stablecoin cycles with the same leverage as traditional fiat liquidity.
When foreign exchange buffers are scarce, the scope for monetary and exchange rate policy in day-to-day operations decreases. At the same time, the BIS (Bank for International Settlements) and FSB (Financial Stability Board) warn that the use of foreign currency-based stablecoins in EMDEs (Emerging Market and Developing Economies) can lead to currency substitution, seigniorage loss, and more difficult governance conditions.
In practice, closed digital cycles easily emerge – for example, remittance receipt into a stablecoin, merchant payment, wallet-to-wallet transfer, and sometimes a later cash-out. Central banks and authorities then attempt to intervene more strongly at corresponding institutions such as local on/off ramps with licensing and reporting requirements, but nevertheless lose the direct intervention logic of bank transfers and liquidity.
TokenPay envisions a future where cleanly regulated and locally rooted stablecoin models fill part of this gap, especially when backing logic, reserve holding and supervision are organized domestically and designed to be compatible with local sovereign debt/liquidity regimes.
Africa is already and will remain “Digital First”
Stablecoins have enormous potential for the African continent, which they are already demonstrating daily. This emerging market needs and is receiving standardization and regulation from the government. Cross-border stablecoin/fiat transactions are already conducted in a controlled, auditable, and secure manner. Expanding existing and creating new licensing models for regulated financial institutions in Africa is crucial for the sustainable development of this trend.
This entails coordinated processes between authorities, banks, payment service providers and large stablecoin providers, such as freeze/investigation options or clean fiat endpoints on bank accounts.
Providers like TokenPay can already facilitate large transactions between Europe and Africa at significantly lower costs than before, thanks to their existing regulated partners. The impact of such opportunities is enormous for a growing economy. It also offers major European economies the chance to further develop and strengthen their trade relationships with Africa and to find new markets in this rapidly growing region.
For TokenPay WorldTransfer transactions to and from Africa, you can find here More information.
A shortened version of the article was also published on HustleYangu, an East African business blog: link
Sources
- KBCC 2026 (official)
- Reuters/Ecobank Yuan Settlement (via MarketScreener, Reuters text)
- AfCFTA/PAPSS Overview
- PAPS via local currency settlement
- World Bank Kenya Economic Update (5.6% 2023)
- Nigeria NBS GDP 2023 (2.74%)
- Ghana/IMF (2.9% 2023)
- Stats SA (0.6% 2023)
- IMF Côte d'Ivoire (~6.4%)
- WITS Nigeria Trade Profile
- WITS Ghana Trade Profile
- Chainalysis SSA 2024 (125bn / 43% stablecoin share)
- World Bank Findex SSA Overview
- GSMA SOTIR (Mobile Money)
- World Bank Remittance Prices Q2/2024 (SSA 8.37%)
- World Bank Migration/Remittances Press Release (SSA 54bn)
- World Bank Findex Barriers
- World Bank Correspondent Banking Decline
- Reuters on RMB settlement in Africa (p. 2)
- UNTIL Annual Report Chapter on Stablecoins/Digital Dollarization
- UNTIL CPMI Cross-border stablecoins
- IMF REO Sub-Saharan Africa (Reserves/FX printing)
- IMF REO Sub-Saharan Africa April 2024
- FSB report Regarding the decline in CBR
- EUR-Lex MiCA Summary
- ESMA/ESAs Factsheet (EMT/ART/CASP)
- Circle MiCA/EMI notice
- TRM Global Crypto Policy Outlook 2025/26 (Regime heterogeneity)
- FATF Increased Monitoring (Kenya)
- National Bank of Ethiopia P2P Notice
- Afreximbank/PAPSS operational roll-out
- FSB stablecoins in EMDEs (2024)
- Circle MiCA EURC Whitepaper (Compliance/Redemption)
- PAPSS African Currency Marketplace
- ADB/Tralac Survey (Trade Finance Gap Africa 2024, Drivers)
- Afreximbank African Trade Report 2025 (approx. USD 100 billion annual gap)
- IMF REO Sub-Saharan Africa April 2026 (reserves less than 3 months import coverage)
- BIS Bulletin 108 (99% USD stablecoins, market concentration)
- ECB Blog (USD dominance, EUR stablecoins marginal)
- Kenya Law, VASP Act No. 20 of 2025 (Entry into force/Regulations)
- ESMA Interim MiCA Register (central register)
- FSCA Update CASP Licensing (300/512)
- Xinhua with reference to China Customs (China-Africa Trade 2024)
- Statista on GDP growth in Rwanda
